Asian stocks lifted by oil price, Chinese data

A surge in US oil prices and upbeat data from China has spurred a broad lift in Asian stockmarkets.

Asian shares were broadly higher on Tuesday, lifted by a surge in US oil prices and upbeat data from China.

The Nikkei Stock Average added 0.7 per cent, while South Korea’s Kospi gained 0.6 per cent. The Shanghai Composite Index climbed 0.7 per cent, though Hong Kong’s Hang Seng Index retreated 0.1 per cent.

China’s producer price index, which measures prices at the factory gate, declined 1.7 per cent in July from a year earlier, compared with a 2.6 per cent on-year drop in June. That was a better result than economists had expected, and suggested the declines in producer prices may be bottoming out, after lingering in deflationary territory for over four years.

Earlier in the day, news that the Organisation of the Petroleum Exporting Countries planned to hold informal talks in September, possibly leading to production cuts, pushed US oil prices up 2.9 per cent to $US43.02 a barrel on Monday, though prices retreated in Asian trade.

The oil-price gains lifted shares of Cnooc, China’s largest oil and natural gas producer, which gained 1.0 per cent in Hong Kong.

In Asia afternoon trade, Brent crude prices gave up some of their gains to trade 0.8 per cent lower at $US45.03. This was mostly on profit taking, as analysts expressed skepticism that major oil producers would agree to a production freeze in September. Even if an agreement was reached, it would have limited impact on prices as global oil production is nearly at a full tilt, some analysts said.

Meanwhile, commodity stocks across Asia got a boost from Monday’s trade data from China.

“China’s July trade data...further underscored the improved global demand for commodities,” said IG market analyst Angus Nicholson, adding the volume of copper and iron ore imported by China continued to grow at strong levels in July.

In Australia, shares of Rio Tinto Ltd. gained 1.6 per cent while Hong Kong-listed MMG Ltd., a unit of China’s Minmetals Corp, rose as much as 1.0 per cent during the session before ending flat.

“Coal and steel prices picked up significantly on speculation that increased government spending on infrastructure projects will lift up demand for hard commodities,” said Zhou Hao, senior emerging markets economist for Asia at Commerzbank AG.

Elsewhere in the region, preliminary data from South Korea’s Finance Ministry showed that retail sales there have continued to pick up in that country.

Sales at South Korea’s top department stores rose 10.5 per cent in July from a year earlier, building on June’s 13.5 per cent gain. Sales at Korea’s leading discount-store chains also rose 5.8 per cent in July from a year ago, after a 2.9 per cent rise in the preceding month.

Among Korean retailers, Lotte Shopping rose 0.5 per cent on Tuesday, and Shinsegae Co. added 1.4 per cent.

In Hong Kong, profit-taking pressure sent shares of key developers down, with Sun Hung Kai Properties shedding 0.3 per cent, and Sino Land sliding 1.0 per cent.

The Hang Seng Property Index, however, was still up 12.1 per cent since the start of the year, and analysts expect further gains with US interest rates likely to remain very low.

- Dow Jones newswires